Author Question: The short-run equilibrium for a monopolistically competitive firm is at P = 28.47, ATC = 22.13, and ... (Read 63 times)

karlynnae · **on:** Jun 30, 2018

The short-run equilibrium for a monopolistically competitive firm is at P = 28.47, ATC = 22.13, and MC = MR = 17.47 . Which of the following is true?
a. Per-unit profit is 11.
b. Additional firms will be attracted into the industry.
c. The firm could raise price and increase profits.
d. The firm could lower price and increase profits.
e. Average cost must be rising.

Question 2

A young chef is considering opening his own sushi bar. To do so, he would have to quit his current job, which pays 20,000 a year, and take over a store building that he owns and currently rents to his brother for 6,000 a year. His expenses at the sushi bar would be 50,000 for food and 2,000 for gas and electricity. What are his explicit costs?
a. 26,000.
b. 66,000.
c. 78,000.
d. 52,000.
e. 72,000.